Pasinex reported a 700% increase in net income in 2017 and production per day at the Pinargozu zinc mine increased by 34% in Q4 2017 compared with Q1. What are the reasons for this success?

Indeed, the project has been very successful with a profit of US$1.58 million in 2017, and we became the highest tax paying company from the mining sector in Adana. We have more than 200 people employed in our project, both local and ex-pats, and it is a role model operation. Our success is down to our team and our ore resources. We have had good planning and strategy and completed our NI 43-01 last year. The zinc prices have also been favorable recently, having jumped in the last two years.

We want to have a bigger zinc operation and our strategy is to acquire more land and make JVs with other companies. We keep ramping up our production and plan to increase it next year as well. Also, we are not only doing mining but also exploration and are continuing to extend our ore resource. We are drilling 20,000m of holes underground and surface and we have so far defined the resource well using various techniques from satellite imagery to GIS; this approach has also been key to our success.

Compared to other zinc producing mines in Turkey, what are the advantages of Pinargozu mine and could you tell us more about Pasinex’s exploration plans?

The grade is higher, and we have three different ore bodies: oxide, sulfide and mixed. The oxide ore body is on average 35%, which is very high. It is directly sellable ore; we do not have any chemical processing facilities – we do just mining, classification and sorting and then selling. Therefore, it is also an environmentally friendly operation. We are also selling concentrate and our sulfide grade is high at 45%.

We have identified a 10km zone which is open on deep and strike where we must go and drill more locations. Our JV company Horzum (50:50 with Akmetal) holds three licenses and we are extending our ore zone in the Akkaya and Pinargozu licenses. We are using geophysical geochemistery techniques to identify the deeper section of the ore body.

The cost per tonne at Pinargozu decreased from C$288 in 2016 to C$183 in 2017 but is expected to increase in 2018. What are the reasons for this?

It is due to the increase in the zinc price and the fluctuation in the US$/Turkish lira exchange rate and also more ore production. The operation is not very labor intensive and we have much mechanized mining and high productivity so this has kept the cost lower.  At the same time, fuel increases are expected to push up costs as we transport our material from the Kozan region in Adana 80km to the port of Mersin. Fees for forestry permits and royalties have increased. In fact, Turkey has very high forestry fees compared to other countries.

Is it still difficult to obtain forestry permits?

The situation has not changed and it is one of our main challenges as without a permit you cannot do drilling and expand your mining operation. It used to take a couple of weeks but now it takes years; it is a terrible situation and we hope that it will change after the elections in Turkey in June 2018.

Do you have any updates on the Golcuk copper project?

We are in the process of extending the license for another ten years as it is due to expire. We have a small pit and our annual production is around 3,000 mt/y ore production. Last year we did some drilling and this year we will drill other sections and continue defining the geology. We hold 400 ha and we have only explored a small proportion so far.

The Soma mine disaster had a big impact on the sector. What safety standards does Pasinex have in place?

Firstly, we have semi-mechanized mining in the development and stoping phase. Secondly, we have a zero-tolerance approach for safety, health and the environment; we do not accept any sub-standard conditions and acts, and employees must report any incident and accident, including near misses, immediately. We have safety managers and engineers, and a surveillance monitoring system working underground. Pasinex continuously trains and educates its labor force, has put a safety culture in place, and applies both local and international standards. So far, we have had no fatalities and we hope this will continue. Continual safety awareness is very important and it is a topic of discussion at the beginning and end of every shift.

What is your outlook for the Turkish mining industry and foreign investment?

I am bullish on the future for mining in Turkey. We have a pro-mining government and support from mining department MIGEM. Of course, it could be better but things will change in favor of mining companies. This country needs to attract more mining and foreign investments. We wish to see more foreign and local mining investors in Turkey, and the mining sector can build a better future for all concerned. The potential is so high because Turkey is on the Tethyan Metallogenic Belt and, although there is not a huge world-class deposit, there is everything from gold, base metals to coal. The government must be able to use this wealth.

Foreign investors are crucial for more mining developments in Turkey. They have brought many technologies, human resources, guidelines and education. Thanks to foreign mining companies, we now have more skilled mining professionals and technical persons in Turkey. Turkey has become the biggest gold producer in Europe because of foreign investment and it benefits greatly from mining activities and operations. In this context, Pasinex’s mission to become biggest base metal company in Turkey.